Gas
Egypt gas deficit deepens import bills amid regional conflict
Escalating conflict involving Iran has doubled Egypt's liquefied natural gas import costs, forcing cargo deferrals and increased fuel oil burning for power generation.
Key points
- Egypt's domestic natural gas output fell to 3.63 billion cubic feet per day in August as older fields declined.
- The petroleum ministry extended exploration bid deadlines to December 14 following requests from interested companies.
- Rising import costs prompted authorities to defer multiple liquefied natural gas cargoes into 2027.
What happened
According to OilPrice.com reporting, ongoing conflict involving Iran has driven up Egypt's liquefied natural gas expenses, doubling single cargo prices to over 100 million dollars since September. To manage the financial strain, authorities in Cairo have asked suppliers to defer several November cargoes into 2027, adding to roughly 15 shipments postponed since July.
Egypt's domestic natural gas production has experienced a steady decline since late 2021, dropping to an average of 3.63 billion cubic feet per day in August. Older fields are losing about 120 million cubic feet per day each month, outpacing the output from newly commissioned wells. In response to the supply shortfall, the Egyptian General Petroleum Corporation has turned to high-sulfur fuel oil, importing over 640,000 tons in October to keep power plants running.
Exploration and policy adjustments
To reverse declining output trends, the petroleum ministry extended the application deadline for 14 exploration blocks to December 14. These blocks, offered through two separate round processes by the Egyptian General Petroleum Corporation and the Egyptian Natural Gas Holding Company, include acreage in the Western Desert, the Gulf of Suez, the Mediterranean, the Nile Delta, and North Sinai.
Minister of Petroleum Karim Badawi has previously outlined targets to boost domestic output through new projects involving international energy companies including Eni, BP, and Chevron. Meanwhile, the government has accelerated its renewable energy targets to 2028, aiming to expand solar and wind capacity to reduce reliance on imported fossil fuels for domestic power generation.
Why it matters
Egypt's struggles highlight the vulnerability of gas-dependent African economies to international supply disruptions and price shocks. For energy investors and policymakers across the continent, the situation demonstrates the operational risks when mature gas fields decline faster than replacement projects can be brought online. With Brent spot prices recorded at 123.10 US dollars per barrel and Henry Hub natural gas at 2.76 US dollars per MMBtu in late October 2026 according to US Energy Information Administration data, net-importing nations face severe fiscal pressures. The crisis underscores why African producers, including Nigeria, must prioritize both domestic reserve development and robust infrastructure financing to insulate their power sectors from external shocks.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
76.9% of electricity in Egypt came from gas in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
